Energy analysts propose sector efficiency as global oil companies reel under operational losses

Energy analysts are urging international oil companies to prioritise operational efficiency in a bid to restore profitability. They believe improved efficiency could help firms recover from recent post-tax losses.

The advice follows Tullow Oil Plc’s announcement of a $61 million post-tax loss for the first half of 2025 — a sharp reversal from the $196 million profit recorded in the same period last year.

Speaking in an interview, energy analyst and Executive Director of the Centre for Environmental Management and Sustainable Energy, Benjamin Nsiah, urged Tullow Oil to ramp up production as part of its recovery strategy.

“National and international oil companies must improve operations and increase output to remain profitable, especially since oil prices are unlikely to rise much higher than current levels. If prices stay flat and production remains constant, revenues will decline. Continued losses could eventually force some companies into liquidation,” he warned.

Meanwhile, as of June 30, 2025, Tullow’s net debt stood at $1.6 billion, a modest improvement from $1.7 billion a year earlier. Cash gearing was 1.9 times net debt to EBITDAX, or 2.1 times excluding Gabon, down from 2.3 times at the end of 2024. Liquidity headroom narrowed to $0.2 billion, compared to $0.7 billion in the same period last year.

Commenting on the results, Richard Miller, Chief Financial Officer and Interim CEO, said the company remains focused on its strategic priorities, including refinancing its capital structure, optimising production, growing reserves, and managing costs.